White House ousted IRS chief counsel Ken Kies after he warned a request would violate audit-interference law

On July 17, 2026, Reuters, The Wall Street Journal, and Bloomberg reported that Kenneth Kies, the Internal Revenue Service's acting chief counsel and the Treasury Department's assistant secretary for tax policy, was forced out of his role in the preceding days after refusing White House demands related to tax audits. According to three people familiar with the matter, Kies told administration officials that a request they were considering would violate 26 U.S.C. Section 7217, the federal law barring the president, vice president, and White House staff from directly or indirectly asking the IRS to open or close an audit of a specific taxpayer -- a provision tax officials describe as the primary safeguard against weaponization of the tax system. Kies is expected to leave the administration in mid-August; Trump has nominated Jim Gadwood, a tax attorney from a firm that has represented Trump on tax matters, to succeed him as IRS chief counsel.

Kies previously worked as Trump's personal tax lawyer before joining the administration and said he had recused himself from matters involving Trump's own taxes; his team had also declined work tied to a Justice Department settlement granting Trump, his family, and his businesses broad immunity from IRS scrutiny -- a deal a federal judge voided this week, finding it was brought in bad faith to legitimize an improper agreement. Two administration officials disputed that Kies was ousted over the audit warning, telling Reuters his removal instead reflected concerns about his temperament, work ethic, and computer literacy; the Treasury Department did not respond to requests for comment, and Kies declined to comment.